Liability-responsive asset allocation A dynamic approach to pension plan management It's no secret that pension plans have faced changes lately. Many have been hit hard by market volatility. The Pension Protection Act of 2006 has changed the way plan sponsors look at pension plans. They aren't just looking at their assets—they're looking at their liabilities, too. This shift in perception drove Russell to develop a new approach—liability-responsive asset allocation. Liability-responsive asset allocation allows a plan to adopt an appropriate level of equity investment at a particular funded status, while also allowing for automatic adjustment of that strategy if funded status changes materially. What is liability-responsive asset allocation? A dynamic approach to strategic asset allocation for defined benefit pension plans that is tied to changes in funded status. Who is LRAA designed for? Pension plans. Specifically, it may be more attractive to frozen plans or those with low rates of new benefit accruals. Download our liability-responsive asset allocation paper, where we:   Describe how a plan might implement an LRAA strategy Provide examples of an LRAA schedule Outline 8 practical considerations that arise under an LRAA approach Related research Russell Retirement Report 2009: Where next for LDI? The defined benefit plan of 2017 (PDF) Related links Liability-driven investing and Interest Rate Management (IRM) Asset allocation process Defined benefit plans For more information about liability-responsive asset allocation, please contact James or Gerry:   West Coast   East Coast James Barrett Managing Director 866-926-5934 Gerry Lillis Director 866-459-4128 Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional. This material is not an offer, solicitation or recommendation to purchase any security. Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company. Date of first use: April 2009 USI-3698